Although hepatitis C virus (HCV) is a leading cause of morbidity and mortality worldwide, the effects of viral gene expression on infected cells remain unclear in vivo. Previously, we reported the construction of transgenic mice expressing HCV structural proteins (core, E1 and E2) and showed that expression of HCV structural proteins is not directly cytopathic in this animal model. Using DNA immunization, we were able to induce antibodies, T cell proliferative and cytotoxic T cell responses against the HCV core but only antibodies against the envelope protein in these transgenic animals. In contrast, the cellular immune responses appeared to target predominantly against the envelope proteins in wild-type mice. These results suggest a hierarchy of CTL response against the HCV structural proteins (envelope>core) in the wild-type mice, and an immunological ignorance toward the core but tolerance toward the envelope proteins at the T cell level in the transgenic mice. Our laboratory has also generated transgenic mice expressing HCV full-length polyprotein and is developing a system for the inducible expression of HCV transgene Based on the tetracycline regulatory system, we established a binary transgenic model in which the conditional expression of two transgenes, SV40 T antigen (TAg) and LacZ, can be tightly regulated in the liver by administration of tetracycline. Mouse albumin or mouse urinary protein (MUP) promoter was used to achieve liver-specific expression of the tetracycline-responsive transcriptional activator (tTA) in one set of transgenic mice. These mice were crossed with transgenic mice carrying either TAg or LacZ under the control of tTA-regulated promoter. Analyses of mice transgenic for both tTA and TAg (or LacZ) revealed that the liver-specific expression of the transgenes could be suppressed to undetectable level and regulated in a reversible fashion by tetracycline administration and withdrawal. Mice with tTA and TAg transgenes developed hepatocellular adenomas and hyperplasia that could be prevented by continuous tetracycline administration. This experiment demonstrates the value of this binary transgenic model in studying the physiological functions of any potential genes of interest in a liver-specific manner. We are currently evaluating the regulated expression of HCV proteins in the liver using this model system. These animals will provide a useful animal model not only to address issues of immunopathogenesis and cytopathic potential of HCV gene products but also to study HCV replication in vivo.